Mergers and acquisitions – The merger of companies in Honduras

Mergers and acquisitions – The merger of companies in Honduras

M&A- Honduran law distinguishes between merger and absorption. The difference between the two concepts is that in the first case there is disappearance of all the companies that come to form a new one, while in the second, merged companies disappear to enter into a merging, existing company.

The merger represents a form of dissolution without liquidation, the new companies or the absorbing assumes the rights and obligations of the merged companies.
The merger agreement can hold any number and any kind of commercial companies.

In general terms the conditions to carry out the merger are:

1. Define which will be the absorbing company and the merged one
2. Copy of the articles of incorporation and sustained reforms in each of the participating companies
3. Final balance of each of the companies involved duly signed, stamped and sealed by Certified Public Accountant.

With this information begins the elaboration of the whole process to be performed within the timeframe established by law and according to the following scheme:

Steps:

I. Each company must take the merger agreement in the appropriate manner to amend its bylaws, as an absorbing company or absorbed one.
II. Each merger agreement must be registered with the Public Registry of Commerce, publish the agreement together with the last balance of companies.
III. The merger will take effect 3 months after the referred publications.
IV. The partners of the merged companies which become members of the new Company or absorbed one receive shares in the agreed amount.

The merger process is decomposed into two unequal acts:

• The Merger Agreement, adopted by each of the companies to be merged, whether they disappear or not.
• The Merger Agreement, wherein each of the merging companies have established the foundations of the merger, formulating their will through their representatives and based on social agreement previously adopted.

The Merger Agreement should be adopted according to the kind of society that is, in corporations the agreement is the exclusive competence of the extraordinary general meeting. Upon the merger, it has its effects on the merged companies on the absorbing society and the new companies, according to the case of merger or integration and, finally, on the members and creditors of all companies.

In CENTRAL LAW we have a wide leadership and expertise in the area of mergers and acquisitions, service we provide to our domestic and overseas customers.

Our Lawyers in Honduras stand out and are highlighted in each country on the issues of financing and innovative forms of structuring transactions.

For further information please contact This email address is being protected from spambots. You need JavaScript enabled to view it.

By Claribel Medina
CENTRAL LAW Honduras

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